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GUEST OBSERVER
It’s pretty common nowadays to see the likes of the Reserve Bank of Australia or the Australian Bureau of Statistics issue warnings about the size of Australian household debt. The reason is that the consequences of poor financial decisions often reach far wider than an individual or family.
The global financial crisis showed us how rapidly financial contagion can spread - one person’s debt is another person’s asset, so when the debt is written off so is the asset. However, there has been little improvement in financial literacy in the wake of the financial crisis, the lack of which was one of the underlying causes.
For instance, surveys just prior to the global financial crisis revealed that many Americans taking out home loans either did not read their loan documents or did not understand them. This meant that, in many cases, they did not understand that they were signing teaser loans where the interest rate starts out very low but increases after a few years.
This lack of financial literacy combined with predatory lending caused the subprime loan crisis, the precursor to the full blown financial crisis.
What is financial literacy?
Financial literacy refers to the ability to make sound financial decisions based on knowledge, skills and attitudes, taking into account personal circumstances.
Low financial literacy is particularly concerning in home loans. In an alarming parallel to the United States before the financial crisis, roughly one third of interest-only mortgagees do not understand that their repayments make no inroads into their debt, and that their interest rates will jump considerably after the interest-only period of the loan has expired.
But it isn’t just that low financial literacy increases risk. It is also important for achieving a productive economy. Economic efficiency requires borrowers to not only have good information but to understand it. This allows them to weigh up the costs of borrowing with the benefits that they expect to receive.
If the information is distorted, either deliberately by lenders or through the misunderstanding of borrowers, they will miscalculate the benefits and capital in the economy will be misallocated. Economists call this market failure, a lot of which occurred in the housing market in the United States before the global financial crisis.
Financial literacy isn’t improving
Evidence suggests that financial literacy has not improved since the global financial crisis, and may have gotten worse.
A survey of adult financial literacy in Australia found that in 2014 the number of people who could actually recognise an investment was “too good to be true” - for example a financial asset promising to pay a return much higher than the going return on similar assets and for no greater risk - had actually declined, to 50% from 53% just three years earlier.
The survey also found that those who recognised that good investments (something with relatively low risk) may fluctuate in value fell to 67% from 74%.
But financial literacy education must also go hand in hand with general literacy and numeracy. The Productivity Commission found that 14% of the adult population had relatively low literacy skills in 2011-12. This is defined as being able to, at best, locate basic information from simple texts but being unable to evaluate truth claims or arguments.
The report also found 22% of the population had low numeracy skills, meaning that they can count, add and subtract and do other basic arithmetic. But they cannot understand statistical ideas, mathematical formula or analyse data.
In other words, a significant proportion of the Australian adult population are not equipped to understand the effect of an interest rate increase on their loan repayments, or understand a loan document that includes an interest rate increase after an initial period.
Fixing the problem of financial illiteracy cannot wait until people are in the throes of negotiating home loans and credit cards. And it should definitely take place before Australians resort to pay day loans.
This was the aim of the Australian Government’s National Financial Literacy Strategy, that ends this year. The strategy proposes a number of educational initiatives including embedding financial literacy in the school curriculum, a formal teacher training program, and development of educational resources and tools.
The strategy draws on similar steps that have been adopted by other countries and recommended by the Organisation for Economic Cooperation and Development (OECD).
The problem is that the curriculum is a crowded space. Financial literacy must compete with the latest fashions in school education as well as traditional curriculum content.
<img src="https://counter.theconversation.com/content/84695/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Fighting for curriculum space for financial literacy is a political exercise which governments must play hard. For example, by attaching serious funding to the achievement of financial literacy indicators at the school level, and training and certification for teachers. Increasing financial literacy isn’t just in the best interest of individuals, we all benefit from a more literate population.
Ross Guest is professor of economics and national senior teaching fellow at Griffith University.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/financial-literacy-is-a-public-policy-problem-84695" target="_blank">original article</a>.
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Financial literacy is a public policy problem: Ross Guest

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Author Ross Guest - Professor of Economics and National Senior Teaching Fellow, Griffith University
Australia’s AAA credit rating was under pressure even before the election and is now looking decidedly shaky. Ratings agency Standard &amp; Poors has moved Australia’s rating outlook from “stable” to “negative”, due to debt and a poor chance of budget repair.
This follows warnings from the other major credit rating agencies – Moody’s and Fitch Ratings. The problem is budget repair will only become harder over the coming years, whatever the final numbers in the parliament.
On the parties' approach to budget repair, the Coalition and Labor are virtually indistinguishable as far as the credit agencies are concerned. The May budget projected a deficit (in underlying cash terms) of A$37 billion in 2016-17, gradually falling to $6 billion over the four-year forward estimates.
Labor’s plan is to reduce the deficit from $39 billion to $11 billion over that time. Both Coalition and Labor forecast a return to surplus over the subsequent years and indeed quite large surpluses ten years from now. Budget repair on this scale was utterly implausible before the election and is fiction now.
The government’s so-called “zombie” budget measures were baked into its projections over the forward estimate period. These were mainly the cuts to university funding, family payments and the Pharmaceutical Benefits Scheme. None of these had any prospect of being legislated with the past Senate, never mind with a larger, more powerful set of crossbench senators.
The Parliamentary Budget Office estimates these “zombie” measures to be worth $8 billion in total over the forward estimates. This accounts for roughly half of the difference between the total projected deficits of Coalition and Labor over the same period.
In short, there is little or no prospect of achieving the budget repair that is a pre-requisite for maintaining Australia’s AAA credit rating. Both sides of politics need to spell out to all Australians what this means. The effect of a credit downgrade is like an income cut to households, businesses and government.
It’s similar to the effect of a decline in the terms of trade (relative prices of our exports), and also similar to a loss of national productivity. All of these things effectively reduce our national disposable income. We become poorer as a nation.
Foreign lenders use Australia’s credit rating to set the interest rates that they charge Australian borrowers, mainly governments and businesses. A lower credit rating triggers a larger foreign risk premium in the interest rate that they charge borrowers.
This flows through to the general level of interest rates in the economy, so all firms and households with debts face higher borrowing costs. This can lead to less spending and hiring of workers by firms, and less disposable income for those households.
The major credit agencies are huge private organisations entrusted with capital of shareholders. They make calls about credit ratings not for political purposes but on the basis of what is in the best interests of investors.
The credit agencies are simply making rational assessments. The probability of Australia eventually defaulting on its debt is extremely low, but it is not zero and it is rising, which is important.
The slightly higher risk of default would result in a small downgrade from AAA, as occurred in the 1980s, by the major credit agencies. In turn this would imply higher interest rates, as it did back in the 1980s.
Higher interest rates are definitely bad news for those borrowing. It’s not necessarily good news for those saving either because rates on saving do not increase as much as rates on borrowing.
Also, when rates on overseas borrowing go up because of a larger foreign risk premium in our interest rates, the Australian dollar is likely to fall, as it did dramatically in the 1980s, from US 72 cents to 60 cents in the space of three months. When the Australian dollar falls for this reason our international purchasing power is reduced.
This is quite different to what happens when the Reserve Bank raises interest rates through its control over the official interest rate. In that case the Australian dollar is likely to rise, in the short term at least, which increases our international purchasing power – we can buy more from overseas with our income.
The parliament is like the Roman emperor Nero: “fiddling while Rome burns”, an apt analogy since Europe is where we are slowly headed economically and that won’t be pretty.
To read more from The Conversation <a href="https://theconversation.com/australia-could-be-about-to-lose-its-aaa-rating-and-heres-why-62039?utm_medium=email&amp;utm_campaign=Latest%20from%20The%20Conversation%20for%20July%208%202016%20-%205190&amp;utm_content=Latest%20from%20The%20Conversation%20for%20July%208%202016%20-%205190+CID_873f6ecd844c932714a88a74d5931324&amp;utm_source=campaign_monitor&amp;utm_term=Australia%20could%20be%20about%20to%20lose%20its%20AAA%20rating%20and%20heres%20why" target="_blank">click here.</a>
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Australia could be about to lose its AAA rating

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The perennial debate about negative gearing of residential property investments has been reignited yet again, by two reports in the past week.
The International Monetary Fund has <a href="https://www.theaustralian.com.au/national-affairs/imf-calls-for-exemptions-to-be-stripped-from-the-gst/story-fn59niix-1227066994700">nominated taxes</a> on housing as ripe for reform in order to improve the efficiency of the tax system. And the Reserve Bank of Australia has <a href="https://www.rba.gov.au/publications/fsr/2014/sep/pdf/bus-house-fin.pdf">argued</a> that housing credit to investors has become excessive and is driving up house prices.
Although neither report specifically recommends changes to negative gearing rules, the mere suggestion that we look at housing taxation or lending for housing investment is enough to awaken the anti-negative gearing lobby.
Before we go on, a definition: negative gearing arises where the interest on money borrowed for investment in an income-earning asset is greater than the income earned from that asset. The asset is said to be negatively geared.
Investors are prepared to bear this income loss if they think the price of the asset will rise sufficiently to more than offset the income loss. What <a href="https://theconversation.com/explainer-why-negative-gearing-is-bad-policy-21882">upsets some people</a> is that the excess of interest over income is allowed to be deducted against income from other sources, such as wages or business income, for the purpose of calculating taxable income.
<a href="https://theconversation.com/its-time-to-abolish-negative-gearing-9879">Critics</a> see negative gearing as the source of all kinds of evils: it inflates house prices making housing unaffordable for first home buyers and inflates a house price bubble that will eventually burst causing wider economic problems; it is an unfair tax handout to the rich; and it bleeds the government’s budget which is all the worse in these times of stubborn budget deficits. And according to some critics there is no upside – negative gearing serves no useful purpose.
House price rises have other causes
Let’s take a look at these claims. House prices have risen by an average of about 10% per year in Sydney and somewhat less in Melbourne in the five years since the global financial crisis. But in the rest of Australia house price growth has not even kept pace with inflation at 2 to 3% annually.
Part of the growth in Sydney and Melbourne is due to investor demand since, as the RBA notes, housing credit growth is running at twice the rate for investors (about 10%) than for owner-occupiers. But even if we think house price growth in Sydney is a problem caused by excessive investment demand, negative gearing is not the prime culprit.
The rules around negative gearing have not changed significantly in Australia for at least 25 years, so it can’t explain house price growth over the past five years. Persistent record low interest rates over the past few years is the main driver, which the RBA <a href="https://www.rba.gov.au/publications/fsr/">acknowledges</a> has meant that loans remain affordable. In fact the ratio of interest payments to household income has actually fallen since 2009.
Sure, if we restricted the tax advantages of negative gearing we would dampen investor demand for housing which would slow house price growth in Sydney and everywhere else. But at what cost? It would be tougher to rent a property, hurting low income households.
Rental vacancy rates are already low in Sydney and Melbourne and in fact have fallen in the last couple of years. Critics <a href="https://www.macrobusiness.com.au/2014/09/hia-continues-negative-gearing-subterfuge/">refute</a> this argument. They say that the vast majority of investment demand is for existing properties rather than investments in new housing stock, which simply drives up house prices. True, but higher house prices make new housing construction profitable, which boosts the rental housing stock. So restricting negative gearing is a very inefficient way of tackling a perceived house price bubble – which in any case is restricted to Sydney and, as I’ve <a href="https://theconversation.com/memo-to-the-imf-there-is-no-housing-bubble-27925">argued</a> before, is not about to burst.
What about the fairness argument? The RBA <a href="https://www.rba.gov.au/publications/fsr/2014/sep/pdf/bus-house-fin.pdf">report</a> shows that negative gearing is by no means restricted to the rich. About half of all housing property investors have household incomes under A$100,000. Half of all household property investors are young – 30% are under age 40 and 60% are under age 50. Also, if we want to be fair we have to be consistent. This would mean tackling negative gearing on other income-earning assets such as company shares and business ownership. And we would have to explain why we would want to tax the interest income received by the lender but not allow the borrower to deduct the interest paid, which would amount to double taxation.
Consider the many alternatives
If we want to tackle fairness in the tax system, there are lower hanging fruit. For example we could bring the family home into the pension assets test, address tax avoidance through artificial structures such as discretionary trusts, and tax superannuation contributions at marginal tax rates (as long as we keep withdrawals tax-free).
The budget saving argument is also overstated. According to the <a href="https://www.ato.gov.au/uploadedFiles/Content/CR/Research_and_statistics/In_detail/Downloads/cor00345977_2011TAXSTATS.pdf">Australian Taxation Office</a>, the total losses on rental property in 2011/12 were A$6.8 billion. Applying an average marginal tax rate of, say, 35%, this amounts to A$2.4 billion in tax revenue forgone, or 0.6% of total tax revenue in 2012. However we would save much less than this if we were to abolish entirely negative gearing for rental property because investors would switch to other investments and other ways of minimising tax.
We need to be clear about what problem we are trying to fix and consider whether there are better ways of doing it.<img src="https://counter.theconversation.edu.au/content/32014/count.gif" alt="The Conversation" width="1" height="1">
Ross Guest is a Professor of Economics and National Senior Teaching Fellow at Griffith University 
He does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/housing-bubble-or-not-negative-gearing-should-stay-32014">original article</a>.
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Housing bubble or not, negative gearing should stay

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GUEST OBSERVATION
Australia’s house prices are grossly overinflated – if you believe <a href="/expert-insights/buying/imfs-min-zhu-are-we-watching-the-same-movie-again-with-house-price-rises-preceding-a-crisis">the International Monetary Fund’s recent analysis</a>.
It says radical <a href="https://www.imf.org/external/np/speeches/2014/060514.htm" target="_blank">policies</a> are required to deflate this emerging housing bubble, such as a stamp duty on house purchases by foreign residents and government imposed controls on bank lending for housing.
The IMF’s analysis of global house prices – especially with respect to countries like Australia - is misleading. It has focused on two measures of housing affordability: the ratio of house prices to household incomes and the ratio of house prices to rents. On both measures Australia’s house prices are one of the highest in the developed world – higher than the US and almost all of Europe.
In Australia the house price to income ratio is 30% above its historical average, behind only Canada and Belgium among the 22 advanced countries chosen by the IMF. Similarly, the current growth in house prices of 7% in Australia is the 7th highest among the 22 chosen countries.
But the IMF has ignored the <a href="https://www.ahuri.edu.au/themes/housing_affordability" target="_blank">preferred measure</a> of housing affordability, at least in Australia, which is the proportion of income spent on housing costs. For home buyers (not renters) this is best measured by repayments on hew housing loans as a percentage of household disposable income. This measure is now around the average of the last 30 years for Australia at a little over 20%, and falling due to low and stable interest rates.
The typical standard variable housing rate has been at 5.95% since August 2013, which is the lowest rate on record except for a brief period at the depths of the global financial crisis (GFC) in 2009.
Also households are not piling up debt to buy houses like they were before the GFC. Household debt has been flat as a proportion of income since 2007. And household saving is at the highest level for 25 years.
What’s wrong with this picture?
This is not a picture of unsustainable house price growth in Australia. The same generally applies globally given that interest rates are typically even lower than they are in Australia.
It is true that house prices are going up globally, having slumped after the GFC. But even on the IMF’s figures global house prices are still 5% to 10% below their peak in 2007 – and even lower relative to other prices which have gone up over that time.
The IMF is wasting its time asking central banks to worry about house price growth. Central banks in the US, Europe and now Japan are deliberately pumping new money into the economy, and have cut their official interest rates to virtually zero in the hope of stimulating spending and jobs growth in the face of anaemic economic growth. Australia’s Reserve Bank has not had to resort to this, but for others, cheap money and plenty of it is the only policy they have left, given that government debt has reached unsafe levels in most countries preventing them from spending their way to stronger growth. Average government debt in OECD countries is now 110% of national economic output of goods and services.
However, as the famous analogy goes, cheap money is like pushing on a string. It won’t make households spend or businesses invest if they don’t have confidence in their economic prospects. Instead the money goes into assets like housing and the stock market, pumping up those asset prices. Central banks are relaxed about this. Indeed it is deliberate in the hope that rising wealth (on paper at least) will encourage consumption and investment spending. The risk of a housing or stock market bubble is seen as the lesser of two evils – the price that must be paid to try to stimulate spending on goods and services and to create jobs.
Foreign investors are not to blame
One of the IMF’s suggestions – a stamp duty on foreign purchases of investment properties – may have populist appeal to Australians who are worried about Chinese buyers inflating house prices here. It may appeal to the Australian government for this reason as well as being a revenue raising measure – and it is something they could do independently of any Reserve Bank action. But such a policy has dubious merit on balance.
Foreign investment, whether it is in domestic real estate or manufacturing or mining, tends to increase national wealth. If a foreign resident is willing to pay an Australian owner more for their asset than any Australian resident, why shouldn’t the owner sell? The owner’s, and Australia’s, wealth rises. The Australian dollar also rises which transfers income to all Australians since they can now buy goods and travel overseas more cheaply.
Of course not everybody wins. Potential buyers of Australian assets – in this case houses – find that they are more expensive than they otherwise would be. In simple dollar terms, the gains to the winners outweigh the losses to the losers – so in principle the losers can be compensated through the tax and subsidy system.
In short, Australia doesn’t have a house price bubble. Nor probably does the rest of the world at the present time. However even if it did, central banks would not likely do anything about it until their economies start to grow more strongly.
Ross Guest is professor of economics and national senior teaching fellow at Griffith University.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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Memo to the IMF: There is no housing bubble

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Despite talk of a housing bubble in Australia, house prices have been flat in real terms over the past six years since the pre-financial crisis peak in December 2007. The weighted average of established house prices in Australia’s capital cities has just kept pace with inflation, according to the <a target="_blank" href="https://abs.gov.au/ausstats%5Cabs@.nsf/mediareleasesbyCatalogue/CEE35CDA94704AB0CA257A4C00126898?Opendocument">Australian Bureau of Statistics</a> house price index.
Much discussion has focussed on short-term factors that have supported housing prices since the crisis: Chinese buyers, low interest rates, the switch from shares into property by investors, and the renewed willingness to take on debt since households and investors have repaired their balance sheets post-crisis.
But we need to bear in mind potential long-term drivers of house prices, one of which is population ageing. We’ve known about population ageing in Australia and other developed countries for a long time. It’s like the Queen Mary - we can see it coming from a long way off, but it’s difficult to turn around.
Predicting house prices
There have been some over-hyped predictions about the potential effect of population ageing on house prices in the past. The so-called “asset meltdown” hypothesis was fuelled by some influential <a target="_blank" href="https://www.nber.org/papers/w2794">US</a> <a target="_blank" href="https://piketty.pse.ens.fr/files/PoterbaRESta2001.pdf">economists</a>. They said that the retiring Baby Boomers would sell down their assets, like housing and shares, to pay for their retirement, causing asset prices to plunge. The infamous Mankiw and Weil paper, for example, predicted that US house prices could fall by up to 40% as the baby boomers started to retire between 1990 and 2007. Suffice to say, this didn’t happen!
My <a target="_blank" href="https://econpapers.repec.org/article/blaausecr/v_3a43_3ay_3a2010_3ai_3a3_3ap_3a240-253.htm">research</a> for Australia suggests such a prediction is way out of the ball park (as are many other predictions of calamitous change to be wreaked by population ageing – but that’s a topic for another day). That said, ageing will affect house prices. But it will be a slow-burn effect, occurring gradually over several decades, and the magnitude will be modest.
According to our <a href="https://econpapers.repec.org/article/blaausecr/v_3a43_3ay_3a2010_3ai_3a3_3ap_3a240-253.htm">analysis</a> based on both econometric estimation using historic data as well as predictions from a household behavioural model, ageing will cause house prices to be lower than they otherwise would be, by somewhere between 3% and 25% over the next 35 years.
Two factors drive the effect of ageing on house prices in Australia. First is the declining population share of 35 to 59 year olds who have the highest incidence of property purchases, including both investment and owner-occupied housing. Investment housing has increased as a share of total housing purchases in the last two decades according to <a target="_blank" href="https://www.rba.gov.au/Statistics/Bulletin/D05hist.xls">data</a> from the Reserve Bank of Australia, and it is the 35 to 59 year olds who tend to be housing investors.
Second, older people may trade down in order to release housing equity to support their retirement. The latter effect has, however, become weaker as households have the ability to <a target="_blank" href="https://theconversation.com/your-home-as-an-atm-home-equity-a-risky-welfare-tool-22000">withdraw equity</a> in their house without needing to sell it, through facilities such as equity redraw loans and reverse mortgages.
Housing bubbles and baby booms
The link between house prices and demographic change could also run the other way: from house prices to the population age distribution.
High house prices tend to reduce fertility rates according to the <a target="_blank" href="https://www.nber.org/papers/w17485">international evidence</a>, at least among non-home owners, although it may increase fertility among existing home owners. High house prices reduce the affordability of children for non-home owners, but increases the affordability for existing home-owners by increasing their wealth. In fact given financial and emotional investment in both housing and childbirth it stands to reason that these decisions are related in quite complex ways, and depend on government policies in the areas of family assistance and housing affordability. I plan to investigate these relationships for Australia with co-authors from Macquarie University and the ANU.
One of the lessons from economics is that it’s very risky to extrapolate from the past by drawing straight lines from historic data into the long-term future, for two reasons: the economy has powerful self-correcting forces that we tend to underestimate; and unexpected shocks – Donald Rumsfeld’s “unknown unknowns” – can throw the data off course for a considerable period of time.
This was the fate of Mankiw and Weil’s prediction of a possible 40% fall in US house prices over 20 years – in fact house prices rose dramatically over that period. Compared with the slow-burning effect of population ageing, events like financial booms and crises have a much greater potential to cause swings in house prices over the short to medium term – say five to ten years. And this is the period that matters for most people.
The long term is interesting and we should keep an eye on it. But we’d do well to remember the maxim of the great economist John Maynard Keynes who said: “In the long run we are all dead”.
Ross Guest is head of the department of accounting, finance and economics and professor of economics at Griffith University.
 He is an adjunct professor with the Australia and New Zealand School of Government (ANZSOG) and a national senior teaching fellow with the Australian Government Office for Learning and Teaching.
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. 
 
<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/22750/count.gif" width="1">
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How will Australia's aging population affect house prices?

A new residential tower will be the first piece of a broader mixed-use precinct set to reshape a prominent Newcastle West site, with local developer <a href="https://www.apartments.com.au/developers/gwh">GWH</a> bringing its <a href="https://www.apartments.com.au/new-apartments/cambridge-quarter-newcastle-west-12-denison-street-newcastle-west-nsw-2302">Cambridge Quarter</a> vision to market.

The first release, Tempo, will introduce 87 apartments across a 24-storey tower, marking Stage 1 of the residential component of a larger urban regeneration project planned for the western end of Newcastle's city centre, encompassing the former Cambridge Hotel site.

Positioned on Denison Street, Tempo has been designed as the inaugural building within Cambridge Quarter, a precinct that will ultimately combine apartments, retail activation and revitalised public spaces including the revamping of the Cambridge Hotel.

[smartcode_project:default project_id=135876 project_image_fid=368856]

The tower will comprise a mix of one, two and three-bedroom apartments, including layouts with multipurpose rooms, catering to a broad cross-section of owner-occupiers. Apartment sizes range from around 60 sqm to 192 sqm, with a number of residences oriented to capture views across Newcastle Harbour, the city skyline and coastline.

GWH has emphasised liveability in the design, with open-plan layouts extending to generous balconies and terraces. Residents will have a choice of two interior palettes, while specifications include engineered stone benchtops, SMEG appliances, full-height bathroom tiling and secure building access. Premium upgrade packages will also be available

Multiple rooftop resident retreats will provide communal outdoor space overlooking the harbour and city, offering an elevated amenity layer above the activity of the precinct below.

[smartcode_project:default project_id=135876 project_image_fid=368851]

The broader Cambridge Quarter vision extends beyond the residential tower itself. Ground-level retail activation and landscaped public areas are planned throughout the precinct, creating a walkable neighbourhood environment connected to the surrounding renewal of Newcastle West. The Cambridge Hotel is also earmarked for future redevelopment into a family-friendly hospitality venue integrated with the new precinct.

The project is strategically positioned within walking distance of Newcastle Interchange, providing access to light rail, regional rail services and direct connections to Sydney. Residents will also be close to Honeysuckle, Newcastle Harbour and the city's beaches and coastal walkways.

[smartcode_project:default project_id=135876 project_image_fid=368852]

For GWH, Cambridge Quarter represents one of its most significant Newcastle developments to date. The locally based developer, which has operated in the Hunter region since 1995, describes the project as a new chapter in the ongoing transformation of Newcastle West.

GWH Executive Director Jonathan Craig said the project had been shaped by a focus on creating lasting community connections.

"We take pride in creating places that last. Spaces where people feel connected, comfortable and a genuine sense of belonging," Craig said.

"Cambridge Quarter is something we are truly proud of, a place shaped by local knowledge, built with care and designed to be part of Newcastle's next chapter."

[smartcode_project_cta:default project_id=135876]

Joel Robinson

GWH unveils first release at landmark Cambridge Quarter precinct in Newcastle West

<a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a>,&nbsp;Rainbow Bay's busiest developer,&nbsp;has officially lodged plans for the largest development in its booming local portfolio, seeking approval for a further 88 apartments on Boundary Street.

The proposal&nbsp;at <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">209–213 Boundary Street, Coolangatta</a>,&nbsp;marks the next chapter in the developer's transformation of the southern Gold Coast beachside precinct. It will be its fifth in the area, having already delivered Flow, Awaken and Esprit, while construction continues on the 38-apartment Radia. The new project would rise 57 metres above a consolidated 1,518 sqm site, on the same street as Radia and Esprit.

&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, the proposed development comprises 88 two and three-bedroom apartments across a contemporary podium-and-tower form that integrates extensive landscaping from street level through to the rooftop.

The tower would be delivered above a basement and multi-level podium accommodating resident and visitor parking, with the residential component commencing from level three. The design incorporates cascading planting throughout the façade, landscaped podium edges, and deep planting zones along the Boundary Street frontage.

<img alt="First look: S&amp;S Projects lodges plans for 88-apartment wellness tower at Coolangatta's Boundary Street" data-entity-type="file" data-entity-uuid="677e6615-b5c0-4b6c-b4f9-efb14fcde1a6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ss%20da%20pers.png?VersionId=YOnPKQm7IFXv0M5H326djEpxk80500Hi" />

A key feature of the development is its expansive rooftop wellness and recreation precinct. Plans reveal a resort-style pool deck, gymnasium, sauna, steam room, hot and cold plunge pools, rooftop terraces, barbecue areas and landscaped relaxation spaces positioned to capture views across the southern Gold Coast coastline.

The rooftop wellness focus builds on the vision S&amp;S Projects first outlined when it acquired the site for $20.25 million last year.

"We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden," S&amp;S Projects founder and director Paul Gedoun said at the time.

The proposal seeks a 57-metre building height, representing a 50 per cent uplift on the site's mapped 38-metre height limit. Planning documents argue the additional height is consistent with recently approved and emerging towers in the immediate Boundary Street and Rainbow Bay precinct.

Urbis, acting as planning consultant, said the development would provide "88 dwellings, comprising a mix of two and three-bedroom apartments, contributing to housing choice and supply within an established medium to high-rise coastal urban neighbourhood."

The scheme has undergone extensive pre-lodgement consultation with the City of Gold Coast, with the design refined following feedback relating to architectural expression, landscaping, traffic access and podium treatment.

<img alt="S&amp;S" data-entity-type="file" data-entity-uuid="0a2d70fd-62ac-4b83-97c6-b798fc1243dd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%209.16.31%E2%80%AFAM.png?VersionId=yHmghUwKM3IVGpBktQU1mE.0Lpf3WimG" />

The architectural team is led by Brisbane-based Cottee Parker, one of Australia's most active residential design studios, with landscape architecture by Dunn + Moran. The consultant team also includes ADG Engineers, Windtech and Acoustic Works.

S&amp;S Projects has become one of the most influential private developers operating on the southern Gold Coast. Since entering Rainbow Bay in 2022, the company has assembled a portfolio exceeding $1 billion in end value, establishing itself as a key player in the area's evolution into a premium apartment destination. Pezet Matheson will again handle the sales for S&amp;S.

Coolangatta is entering another wave of apartment development, following the delivery of several prominent residential projects in recent years.

John Kearney's Immerse Projects will launch&nbsp;<a href="https://www.apartments.com.au/new-apartments/kaiya-kirra-beach-5-haig-street-coolangatta-qld-4225">Kaiya on Haig Street</a>&nbsp;soon, meanwhile, Palm Beach-based Sherpa Property Group is preparing to bring its debut Coolangatta development, <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, to market later this year, subject to approvals.

First look: S&S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street

A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Ross Guest

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